O/T
A little light reading.....
King Henry from Treasuryfairyland announced Wednesday that his $700 Bailout plan is not wearing any clothes. Once again, Congress was sold a bill of goods by the outgoing Master Planners (the first bill was Iraq's WMD, half a trillion dollars ago). Paulson announced that Treasury will not buy bank bad mortgage assets, in a 180 degree turn on the main selling point for the plan. Fool me once, shame on you, fool me twice - how does the rest go, Dubya? King Henry fixed Goldman - apparently his job is finished. Stocks responded by losing another 5 percent Wednesday, and has lost another trillion dollars in value over just the past three days. It has lost $9.0 trillion since the October 2007 top. Treasury is essentially saying their hard fought plan won't work, leaving Wall Street hopeless for the moment. So, those toxic assets aren't going anywhere except into the hovering black hole sucking the life out of planet earth's economy. We knew this plan wouldn't work, and said so the day it was passed. The reason is, that it fails to address the source of the problem, the consumer's lack of income due to asset depreciation, job loss, declining investment yields, rising real estate taxes, and a rising cost of living. Buying today's bad assets fails to prevent tomorrow's bad assets from showing up as a new batch of consumers fail to make loan payments, giving birth to the next round of fresh toxic assets, sure as death and Obama raising taxes on the "rich."
The solution is simple: Rebate the past 5 to 10 years of income taxes, up to $10 trillion worth, requiring half the rebate to payoff debt. If households don't have debt, they get to keep all the rebate. This will metamorphose current and future bad assets (loans and loan securities) into good assets. This gets the household back on their feet, heals both household and corporate balance sheets, and choke starts this economy with a boom that could last decades. Sure, the Dollar would take a hit, maybe a 50 percent hit, but debts will be eliminated, a depression will be averted, and everyone gets a fresh start. This stimulus would be alarmingly successful. Then the income tax should be replaced by a national sales and excise tax. Hey, the U.S. surviv ed very nicely for 150 years without an income tax through 1912. Then, the real estate tax should be repealed, an unconstitutional confiscation of wealth, and replaced again by a sales or consumption tax. And finally, to support the Dollar, the Fed should be eliminated, currency should be issued by the Treasury Department, and should be backed by Gold, even if Gold is valued at $3,000 an ounce.
To effectuate the 10 year income tax rebate, the Treasury Department should issue $10 trillion of fresh U.S. government Treasury securities. Those securities should then be sold to the Federal reserve for cash, and the cash would be distributed to every household in America. The tax rebate would not include corporations, just households. Corporations and Wall Street would benefit through trickle up, not the trickle down policies that have failed. Demand for goods and services would skyrocket as households, which account for 70 percent of Gross Domestic Product, buy, buy, buy with the strength of their newfound solid balance sheets. This spending will create jobs all over the place, reinforcing free market capitalism, in opposition to socialist policies that just benefit specific industries or projects that present Congressional thinking suggests a government stimulus plan would adopt, a narrow target policy that will fail.
Everyone needs help now, not just the few high profile, lobbying-spending industries that have the publicity machines to convince government a bailout should be for themselves. The massive income tax rebate plan would benefit the broadest range of targets possible. People paying their debts on time now, but making painful sacrifices to do so, need help now, not just those who have stopped making payments. Having a job today is no guarantee that job will exist tomorrow. The present focus of the Master Planners - to address only those who already hit the fan - is too narrow and will fail to stop the spread of this systemic economic plague. Can you imagine the boost to Detroit's big three auto makers if every household in America got a check e qual to what they paid in taxes over the past ten years? GM's stock would not sit at $3 a share for very long. The Governor of Pennsylvania came out today suggesting he may raise PA income taxes next year. Are you kidding Ed? You've been watching the Eagles' Andy Reid's coaching too long. That is the precise worst thing you can do in a developing depression. He wouldn't have to do that, or even think about doing that, if this federal income tax rebate plan was effectuated.
This plan could be implemented quickly. Very fast. Checks could be in the hands of every household by early 2009. Further, this plan should include a floor tax rebate of $50,000, assuring the poor, who are victims of job losses and a higher cost of living, receive help to get back on their feet. It is the right thing to do, in the spirit of inclusion.
How are things in Kentucky?
. Also wrapped some small prezzies for under our teeny tree in the hotel
- I think I'll leave that til tomorrow
I have not even thought about Xmas. You are my idol.
Is that popular over there at all? Rob loves it. I don't like anything that has to do with ice...unless it's in my glass 
She was sooo close too!
